IOC Q1 Net Profit Doubles on Operational Efficiency, Higher Cracks

State-owned Indian Oil Corporation Ltd (IOC) on Thursday reported that its net profit more than doubled in the first quarter, driven by a surge in product margins and record operational performance.

Its standalone net profit of ₹5,688.60 crore in April-June - the first quarter of the 2025-26 fiscal year - was compared to ₹2,643.18 crore earnings in the same period of the last year, according to a company statement.

The first quarter profit is nearly half of the company's full 2024-25 (April 2024 to March 2025) fiscal year earnings of ₹12,961.57 crore.

The profit surge was despite ₹6,465 crore of inventory losses arising from selling products at rates lower than the price at which input crude oil was bought, lower refining margins and ₹3,858 crore of unpaid LPG subsidy.

The earning boost came from holding retail petrol and diesel prices despite a fall in their benchmark international rates. This led to a margin boost.

"Financial year 2024-25 (April 2024 to March 2025) was record performance year when we achieved highest ever sales of 100 million tonnes as well as highest ever pipeline throughput and marketing expansion. In the first quarter, we have bettered that performance," IOC chairman A S Sahney said.

Refineries processed 18.683 million tonnes of crude oil with 107% capacity utilisation as compared to 18.168 million tonnes in Q1 last year. The firm had highest ever quarterly sales of 26.328 million tonnes while petrochemical sales volume soared 10% to 0.8 million tonnes.

Explaining the reasons for profit surge, he said cracks - or the overall pricing difference between input barrel of crude oil and the petroleum products refined from it - were good in the quarter - USD 4-5 per barrel for petrol and USD 15-17 for diesel.

On top of it, marketing margins too were good as it alongside other public sector units held retail fuel prices despite a fall in input crude oil cost.

IOC's pre-tax profit from the downstream petroleum product sale surged to ₹ 9,137.96 crore in April-June from ₹4,299.96 crore last year.

It earned USD 2.15 on every barrel of crude oil it processed and turned into fuels like petrol and diesel in Q1, compared to USD 6.39 per barrel gross refining margin last year. Core GRM after offsetting inventory loss came to USD 6.91 per barrel.

Sahney said the company is expecting to be compensated for under-recoveries on sale of cooking gas LPG.

IOC and other state-owned fuel retailers like Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) sell cooking gas LPG at below market price and get reimbursed for the difference as subsidy from the government.

The subsidy for Q1 has not been paid even though the government has announced ₹30,000 crore dole for the three companies to cover under-recoveries on LPG last fiscal and in the current financial year.

IOC turnover marginally rose to ₹1.18 lakh core in April-June when compared to ₹2.15 lakh crore in April-June 2024